During the past trading week (November 26 to 30), a provincial securities authority shared details of an investigation into a variety of cannabis companies.

A survey into the minds of cannabis investors from the Ontario Securities Commission (OSC) also made headlines throughout the week alongside a transition in exchanges for a company looking to enter the US market.

Here’s a closer look at what some of the biggest news was during last week’s trading period.

 

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Updates from provincial securities regulatory bodies

The securities authorities from BC and Ontario made entries into the cannabis space — one with an investigation relating to a few companies and the other warning investors of the way these companies are gaining exposure into the sector.

On Monday (November 26), the British Columbia Securities Commission (BCSC) made public its investigation on 11 Canadian Securities Exchange (CSE)-listed companies, four being cannabis primary operations. Peter Brady, executive director of the BCSC, said these companies were part of an “abusive to the capital markets” scheme.

The four cannabis related companies in question are Abattis Bioceuticals (CSE:ATT), Beleave (CSE:BE), Liht Cannabis (CSE:LIHT) and Speakeasy Cannabis Club (CSE:EASY).

A hearing is scheduled for December 7 to determine whether or not to extend a temporary ban imposed by the BCSC on certain trading activity.

SpeakEasy and Liht Cannabis issued statements in response to the investigation during the week.

On the other hand, after completing a survey of over 2,000 investors, the OSC published a report raising concerns about the reasons investors enter the industry.

 

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Thirty-two percent of the surveyed investors admitted to taking advice from friends and family when investing in the cannabis space, with only 18 percent taking advice from a financial expert or a portfolio manager.

“Those with low financial knowledge or who reported having a low risk tolerance were as likely as individuals with higher knowledge or risk tolerance to own cannabis investments,” the OSC wrote.

The survey also found a majority of the respondents who held cannabis stocks in their portfolio would primarily only own pot stocks.

US hemp-based CBD market pushes company to drop TSXV

LiveWell Canada (TSXV:LVWL) announced on Monday (November 26) it would be moving its stock from the TSX Venture Exchange (TSXV) onto the CSE.

The company is doing this as way to pursue an entry into the US market with its hemp-derived cannabidiol (CBD) products.

“The CSE embraces transforming companies like LiveWell who are growing beyond the Canadian borders,” David Rendimonti, president and CEO of LiveWell, said.

LiveWell retained the same ticker symbol and started trading on the CSE this week.

Don’t forget to follow us @INN_Cannabis for real-time news updates!

Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.

 

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** This article is updated each week. Please scroll to the top for the most recent information**

Cannabis Weekly Round-Up: Shortage Leads Alberta to Pause Retail Applications

By Bryan Mc Govern, November 23, 2018

During the past trading week (November 19 to 23), Alberta halted the approval of new retail licenses as it faces a severe shortage of adult-use cannabis product.

The “unprecedented” decision from Health Canada to seek a removal of the federal cannabis license from a public company also made headlines throughout the week alongside our recap of the Arcview Investor Forum and the MJBizCon events in Las Vegas.

Here’s a closer look at what some of the biggest news was during last week’s trading period.

 

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Alberta says no to new and existing retail cannabis applications

On Wednesday (November 21) Alain Maisonneuve, president and CEO of the Alberta Gaming, Liquor and Cannabis (AGLC) issued a statement confirming the province would temporarily stop approving and taking applications for the operation of a cannabis retail shop due to the lack of product available.

The executive said despite the province signing deals with licensed producers to guarantee enough product for 250 stores, Alberta had only received 20 percent of what was ordered.

Maisonneuve announced AGLC’s priority is to supply private Alberta retailers and will therefore focus on securing product for those first.

Heather Holmen, a spokesperson for AGLC, told the Investing News Network (INN) the province will not reveal which LPs have failed to meet their contracts.

Las Vegas opens its doors to entire cannabis industry

The city of Las Vegas played host to the marijuana market as two events served investors with an opportunity to meet the companies up close. INN was in attendance of both shows and had the opportunity to speak with experts in the industry.

At the Arcview Investor Forum speakers such as Abner Kurtin, CEO of Ascend Wellness and Richard Carleton, CEO of the Canadian Securities Exchange (CSE) offered perspectives on the current public cannabis market.

 

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During his opening remarks Troy Dayton, CEO of The Arcview Group, reminded the investor audience how long of a path the cannabis plays still has with states, such as Michigan voting in favor for the legal adult-use of the drug.

In an exclusive interview following his panel, Carleton told INN the Canadian Securities Exchange (CSE) is eyeing 140 applications for new listings, which would represent about a year’s worth of business according to the leading executive, with 60 percent of those being marijuana-related.

At a predictions panel, Carleton explained he has seen the appetite from the cannabis investor audience switch from pure cultivation plays to companies investing in portfolios of intellectual property.

INN also had the opportunity to tour the current cannabis market in Las Vegas alongside investors in the space with stops at a production facility from MPX Bioceuticals (CSE:MPX) and a dispensary operated by Green Growth Brands (CSE:GGBpreviously known as Xanthic Biopharma.

Ascent Industries on the brink of getting federal license removed

Ascent Industries (CSE:ASNT) announced on Wednesday after an additional review from Health Canada, the agency had informed the company it intended to revoke the federal cultivation and dealer license for cannabis given to its LP subsidiary Agrima Botanicals.

“We haven’t seen this unprecedented move by Health Canada before,” Deepak Anand, vice president of business development and government relations with regulatory firm Cannabis Compliance, said in an email to INN.

The company informed shareholders that Health Canada found discrepancies “unauthorized activities with cannabis” which took place when the company was private.

Ascent intends to “exercise its right to be heard under the Cannabis Act and Cannabis Regulations in order to maintain its licences.”

In an email statement to the Investing News Network (INN), Health Canada said it informed Agrima Botanicals of its decision last Friday (November 16).

Don’t forget to follow us @INN_Cannabis for real-time news updates!

Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: Ascent Industries and High Hampton Holdings are clients of the Investing News Network. This article is not paid-for content.

 

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Cannabis Market Update: Q3 2020 in Review

Click here to read the previous cannabis update.

During the first few months of investment time in 2021, cannabis faced some volatility alongside optimism about federal changes in the most important market for the drug.

The cannabis business found its stride during Q1 thanks to policy change signals and consolidation.

To find out more, the Investing News Network (INN) asked experts about progress in the market during the first major period of the new year, and which developments investors should watch out for.

 

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Cannabis market update: New York and US potential boost operations

New York state’s legalization of recreational cannabis was a huge Q1 announcement that added pressure to the federal government when it comes to cannabis policy, said George Mancheril, co-founder and CEO of Bespoke Financial, a debt financing business with a particular focus on servicing cannabis businesses.

“It’s going to add to the chorus of voices in the federal scene to basically move sooner rather than later,” he explained to INN.

Following the US election in 2020, the momentum for cannabis businesses went on the upswing, as did company valuations, with the idea of expansion at the heart of it all, according to Mancheril.

Before starting Bespoke Financial, Mancheril learned from traditional investment banks, where he worked on lending, fixed income and debt markets with Goldman Sachs (NYSE:GS) and Guggenheim Partners.

Nawan Butt, portfolio manager with Purpose Investments, agrees with Mancheril. The financial expert told INN the ongoing legalization process seen in the US market is leading to expansion.

“It’s becoming more of a national move, then small pockets of proliferation. That’s very exciting about cannabis right now,” said Butt, who co-manages the Purpose Marijuana Opportunities Fund (NEO:MJJ).

This proliferation effect is causing a change in valuations and enthusiasm for US-based operations. Mancheril told INN that by the end of Q1, multi-state operators (MSOs) had raised approximately US$3.3 billion.

The cannabis lender said he sees the industry as having grown from the woes of 2019; it is now seeing a return to form by way of the excitement for an ongoing opening process in the US.

The expert explained that there is likely to be a windfall of capital in the wake of major federal changes for cannabis policy, although the timeline for these changes is becoming increasingly hard to predict.

Leading up to that capital influx, Mancheril said he wants to see operators really drill down on the value of desired assets and whether they make sense.

 

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“What I’d hope is that we continue to see bullish sentiment, but with some measure of responsibility, and let’s not just get over ahead of ourselves,” Mancheril told INN. “The idea is let’s minimize the volatility and continue growing responsibly.”

As far as struggles go, Butt explained that the cannabis industry has cemented itself as a growth-type sector, and as such there are macro environment pressures affecting the way these assets operate.

“We’ve seen this preference for cash flows at growth in the current or in the near future, rather than in the far future, and that’s what we’re seeing as far as valuations go in the broad market,” Butt said.

Cannabis market update: Volatility continues to rule as industry foundations build

Despite the industry’s current potential and the growing pains it has gone through as a whole in both the US and Canada, volatility remains a key factor in the cannabis investment scene.

Butt explained that the current shareholder base, which is dominated by hedge funds and retail investors, still lacks enough institutional support to avoid the day-to-day volatility cannabis has come to be known for.

These two investor groups, Butt said, can be easily spooked and excited by the news of the day when it comes to their investments.

“A lot of these institutions’ strategies are not about short-term profits, but they’re about long-term sustainability of the businesses themselves,” Butt said.

“That’s why you see a lot of volatility in the space, and that’s essentially what we’ve seen over the past, I’d say, three to two months as well,” he added.

That means investors shouldn’t expect an end to volatility anytime soon.

“It’s not about whether we continue to expect volatility, because we do,” Butt said. “We really think that the volatility will be taken out when the shareholder base becomes more institutional, but it’s really about understanding why there is volatility in the first place.”

Cannabis market update: Canadians talk up US business potential, but questions remain

A surge of mergers and acquisitions has taken over the Canadian cannabis sector recently as more producers see potential in America.

One of the biggest announcements in this regard came when Organigram Holdings (NASDAQ:OGI,TSX:OGI) secured a C$221 million investment deal from British American Tobacco (NYSE:BTI,LSE:BATS).

Using the funds, the two will work in tandem to develop new branded products designed to work on the international stage, including in the US. Organigram CEO Greg Engel previously told INN that the US represents a critical opportunity for Canadian companies, but the entry point isn’t as clean as it could be at the moment.

 

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While the long-term potential may be exciting for investors, Butt told INN he’s still unsure how the approach will work for Canadian companies.

The Purpose Investments expert said there will be plenty of space for the biggest Canadian names to pursue US market entries, beyond the initial hemp-derived CBD moves some operators have mde, since the US represents the biggest market in the world.

“But there’s just way too many unknowns right now to say exactly what that participation is going to look like, or when that participation will happen,” he said.

“What we do know is that currently the US MSOs are in a wonderful sort of position to expand on their market leadership that they have. And it will be tough for Canadians to come in and compete with them,” Butt said.

Canadian players still retain the upper hand at times in terms of valuation, which is confusing for both Butt and Dan Ahrens, chief operating officer and portfolio manager at AdvisorShares.

“The performance in quarterly earnings of US companies has been rather spectacular. They’ve knocked it out of the park in most instances,” Ahrens told INN.

Butt praised the recent performance reports from MSOs across the board, pointing to year-over-year growth lines and projections for continued positive performance.

In his view, share prices still don’t reflect company value. “Those are really being discounted at this point,” Butt told INN.

“We’ve seen the Canadian licensed producers be really hot stock performance-wise, outpacing the US (MSOs), and I’ll say it’s rather nonsensical to me,” said Ahrens, who oversees the AdvisorShares Pure Cannabis ETF (ARCA:YOLO) and the recently launched AdvisorShares Pure US Cannabis ETF (ARCA:MSOS).

Cannabis market update: Investor takeaway

The cannabis investment proposition finds itself at an interesting moment in time, as the entire sector eagerly awaits confirmation in the US at the federal level.

While for the Canadians waiting on the sidelines, this development may feel like a major necessity to address current financial struggles, for US-based operators, the heat around the corner could represent an increase to their already thriving operations.

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 Trulieve Cannabis Corp. (“Trulieve” or the “Company”) (CSE: TRUL) (OTC: TCNNF), a leading and top-performing cannabis company in the United States will release its first quarter 2021 financial results on Thursday, May 13, 2021 before markets open. Following the earnings release, management will host a conference call at 8:30 AM Eastern Time to review the financial results.

All interested parties can join the conference call by dialing 1-888-231-8191 or 1-647-427-7450, conference ID: 4880609. Please dial in 15 minutes prior to the call to secure a line. The conference call will be archived for replay until May 20, 2021 . To access the archived conference call, please dial 1-855-859-2056 and enter the encore code 4880609.

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Appointment of Dr. Kelmendi, Assistant Professor of Psychiatry at Yale University and co-founder of the Yale Psychedelic Science Group, brings another experienced medical professional to Lobe’s advisory team.

 Lobe Sciences Ltd. (CSE: LOBE) (OTC Pink: GTSIF) (“Lobe” or the “Company”) is pleased to announce the appointment of Benjamin Kelmendi, MD, Assistant Professor of Psychiatry at Yale University School of Medicine, to its Scientific Advisory Board.

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Ayurcann Holdings Corp. ( CSE: AYUR ) (the “ Company ” or ” Ayurcann “), a Canadian extraction company specializing in the processing of cannabis and hemp for the production of oils and various derivative products, is pleased to unveil further details of its Phase 2 expansion plans.

Ayurcann has commenced trading on the Canadian Securities Exchange (” CSE “) on April 8, 2021 and subsequently announced a private placement of up to $500,000 (” Financing “), as per the Company’s press release dated April 12, 2021. The proceeds of the Financing are intended to be used to further pursue Phase 2 of the expansion of the production capacity of the Company’s Pickering facility.

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